G.R. No. 113074, 22 January 1997

FACTS:

Alfred Hahn is a Filipino citizen doing business under the name and style “Hahn-Manila.” Bayerische Motoren Werke Aktiengesellschaft (BMW) is a nonresident foreign corporation existing under the laws of the former Federal Republic of Germany, with principal office at Munich, Germany.

In 1963, Hahn executed in favor of BMW a Deed of Assignment with Special Power of Attorney which essentially, makes Hahn as the exclusive dealer of BMW in the Philippines. Moreover, it stated there that Hahn and BMW “shall continue business relations as has been usual in the past without a formal contract.”

In 1993, BMW and Columbia Motors Corp (CMC) had a meeting which would grant CMC exclusive dealership of BMW cars.

Hahn was informed later that BMW was dissatisfied with how it carrying its business. However, BMW expressed willingness to continue business relations with the petitioner on the basis of a “standard BMW importer” contract, otherwise, it said, if this was not acceptable to petitioner, BMW would have no alternative but to terminate petitioner’s exclusive dealership effective June 30, 1993.

Hahn protested alleging that such termination is a breach of the Deed of Assignment. Hahn insisted that as long as the assignment of its trademark and device subsisted, he remained BMW’s exclusive dealer in the Philippines because the assignment was made in consideration of the exclusive dealership. BMW, however, went on to terminate its dealership with Hahn. Hahn filed a complaint for specific performance and damages in the RTC. RTC issued a writ preliminary injunction. BMW appealed to the CA. CA reversed on the ground that Hahn is not an agent of BMW and that BMW is “not doing business in the Phils.” By virtue of the latter, the writ of preliminary injunction should not have been issued since RTC did not have jurisdiction over it.

ISSUE:

W/N BMW is doing business here in the Philippines.

RULING:

Yes. Hahn and BMW had a Representative Agreement or a Licensing Agreement. This arrangement is whereby a domestic corporation, by virtue of which the latter was appointed “exclusive representative” in the Philippines for a stipulated commission. Pursuant to these contracts, the domestic corporation sold products exported by the foreign corporation and put up a service center for the products sold locally. This Court held that these acts constituted doing business in the Philippines. The arrangement showed that the foreign corporation’s purpose was to penetrate the Philippine market and establish its presence in the Philippines.

In addition, BMW held out private respondent Hahn as its exclusive distributor in the Philippines, even as it announced in the Asian region that Hahn was the “official BMW agent” in the Philippines.

*Case Digest by Benjie L. Sumalpong, JD – 4, Andres Bonifacio College, SY 2019 – 2020